On Social Moods

He asserts that the herding mentality and instincts, which are hard-wired into the most primitive part of every human brain, generate social moods associated with specific timeframes. “Ideas and thoughts move around like a contagious disease and at some point achieve a critical mass, which means that a population has a particular mood at a given time,” he said. “If you have a good way of measuring the social mood, then you have a preview of coming attractions.”

 

Histories Hidden Engine – 90 mins (in 6 parts)
A curious research documentary, making links between patterns in nature, and social and economic trends. At first it talks about social moods, trends in movies and the stock market. The subsequent focus on stock market trends seems a little overkill, but the link to nature and nature’s patterns makes social moods seem more predictable.


Journal of Behavioral Finance
2005, Vol. 6, No. 3, Pages 144-160/ Social Mood and Financial Economics
John R. Nofsinger

 

 

The general level of optimism/pessimism in society is reflected by the emotions of financial decision-makers. Because these emotions are correlated across economic participants, our hypothesis leads to three important outcomes. First, social mood determines the types of decisions made by consumers, investors, and corporate managers alike. Extremes in social mood are characterized by optimistic (pessimistic) aggregate investment and business activity. Second, due to the efficient and emotional nature of stock transactions, the stock market itself is a direct measure or gauge of social mood. Third, since the tone and character of business activity follows, rather than leads, social mood, stock market trends help forecast future financial and economic activity. Specific predictions about stock market levels and trading volume, market volatility, firm expansion, leverage use, and IPO and M&A activity are also given.

 

 

Topics: Development of social moods; What social moods “predict” or tell us; How social moods differ from rhetoric’s classic “situation”

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